There is some brutal competition for retail deposits right now and I think the banks are getting sophisticated about balancing interest rates and consumers’ who satisfice versus those who optimize. They can probably afford to lose the latter.
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I don’t understand the retail deposit business. With rates and vol so low, who has any cash at all on hand?
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Boomers and yuppies, but broadly speaking the American middle class at any given time has a lot of cash and is not very aggressive about optimizing it. This is a perinneal low-cost source of deposits for banks.
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what do you mean by “give this away”?
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Drive the net interest margin to zero because they make their money elsewhere.
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... and yet legacy banks are still offering interest rates of 10bps

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Depositors don’t want the hassle of switching. Although easier today, changing accounts is a daunting task for some. Once you have a customer—member for credit unions—on 2-3 products, you probably have them for life. This is especially true for mortgages.
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Who is trying to get small biz customers rather than consumers this way? I've got personal savings in wealthfront, but biz has a bunch of cash earning essentially zero interest.
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